Suit against Tidyman’s gets new life

A federal appeals court in Seattle has reinstated a lawsuit filed by former Tidyman’s employees against company managers.

The ruling, by the 9th Circuit of the U.S. Court of Appeals, said a Montana judge incorrectly dismissed the suit in January 2009.

That reinstates a legal effort by more than 1,000 former Tidyman’s grocery employees who lost their retirement savings when the grocery chain went out of business in 2006.

The suit accuses executives of mismanaging the company by merging with grocery corporation Supervalu in the 1990s over the warnings of a financial adviser hired to avoid a looming cash crunch.

Defendants are former company executives John Maxwell and Michael Davis, and Tidyman’s Management Services Inc.

The dismissal in early 2009 was based on the Montana judge’s ruling that employees had failed to establish a “demand for action” related to the executives’ alleged misuse of retirement funds, said Bozeman attorney John Amsden, who represents Tidyman’s workers.

The next step, said co-counsel Patrick HagEstad, would be to move forward with procedural claims in the Missoula court and eventually bring the case to trial.